By John Ugo
The Federal Government on Thursday deacribed the Nigerian Automotive Industry as one with a catalytic effect on the economy.
A statement by the Senior Special Assistant to the President on Media & Publicity, Office of the Vice President, Mr Laolu Akande, waited the
Minister of Industry, Trade and Investment ,Otunba Niyi Adebayo as giving stated this while making presentation on the benefits and impact of procuring locally manufactured/assembled vehicles at the meeting of the National Economic Council in Abuja on Thursday.
The ministers briefed the NEC with the Director General of the National Automotive Design and Development Council (NADDC), Mr. Jelani Aliyu.
The Council stated that: the industry has so far made giant achievements with about US $1billion in Foreign Direct Investments and issuance of 63 licenses to over 30 active assemblers.
The initiative targets a demand for 400,000 vehicles per annum.
However, Otunba Adebayo noted that despite the potentials, the industry has been significantly plagued by several challenges such as weak demand for locally assembled vehicles, lack of Government patronage to assist assemblers in achieving economies of scale; and insufficient vehicle credit financing to stimulate private off-take.
The Minister therefoee urged the State Governments to support the quest of driving Nigeria’s industrialization agenda and job creation aspiration.
He listed the benefits of the automotive industry to include serving as a catalyst for driving mass production, local content and transfer of skills and knowledge, potential to stimulate growth in other sectors such as asphalt, wood, gasoline and road construction.
The council also emphasized on the impact of Government’s patronage to enable original Equipment Manufacturers, chieve economies of scale and drive assembly capacity upwards; stimulate economic growth in other sectors such as road construction.
The statement added that it would help prevent fledgling auto assembly companies and downsizing of staff, therefore mitigating capital flights and development of other countries.
The Council further noted that Africa accounts for about 30% of the global Automotive Industry despite its strong demographic profile.
Adebanjo said significant growth is expected to be witnessed in the African vehicle market due to demographic trends, low current base and AFCFTA impact.
The council stated that state governments can utilize locally assembled vehicles in addressing some of the challenges facing the Public Transportation System.